Wednesday, November 30, 2016

Indonesia's Child Labour

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An Amnesty International report alleges that children as young as eight are working in "hazardous" conditions in Indonesia to produce palm oil found in popular household products. Unilever, Colgate-Palmolive, Kellogg's and Nestle are among those linked to Singapore-based company Wilmar, the human rights group says.

Amnesty senior investigator Meghna Abraham said. "Something is wrong when nine companies turning over a combined revenue of $325bn [£260bn] in 2015 are unable to do something about the atrocious treatment of palm oil workers."

Amnesty's business and human rights programme director, Peter Frankental, "Using mealy-mouthed excuses about 'traceability' is a total cop-out from these companies. You can be sure that if one these companies' products were contaminated and had to be taken off the shelves of supermarkets, they would ensure that they could trace the source to specific plantations."


Amnesty researchers investigated the working conditions at plantations in the Indonesian regions of Kalimantan and Sumatra. It found that the palm oil produced at the sites for the company Wilmar had been sold on to manufacturers that produce items ranging from toothpaste and cosmetics to ice-cream. The report details children aged between eight and 14 carrying out physical labour on plantations in Indonesia without safety equipment in areas exposed to pesticides. Some of the children had dropped out of school to work with parents, while others worked in the afternoons, at weekends and during holidays, Amnesty said. It found that some plantation workers were earning as little as $2.50 a day.

Benefit sanctions - wasteful and punitive

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Damian Green, the welfare secretary, who insisted this week that the sanctions contributed to a fairer society and were an important part of the benefits system. Yet, how does he know?

The National Audit Office, Whitehall’s official spending watchdog, has found sanctions on welfare payments are being handed out without evidence that they actually work. The Department for Work and Pensions is also failing to monitor thousands of people whose benefits are being cut or withheld. Auditors concluded the application of the sanctions regime varies across the country and from job centre to job centre, confirming for many that the sanctions system was wasteful and not aimed at finding people work but instead purely punitive.

The report said, “Our review of the available evidence suggests the department’s use of sanctions is linked as much to management priorities and local staff discretion as it is to claimants’ behaviour…”

Alison Garnham, chief executive of Child Poverty Action Group, said: “As today’s NAO report makes clear, the DWP has little idea what impact sanctions have on individuals and, with some areas imposing twice as many sanctions as others, appears to have little concern for consistency. Sanctions create destitution but the DWP is operating almost blind.”

Labour MP Meg Hillier, who chairs the public accounts committee, said: “Benefit sanctions punish some of the poorest people in the country. But despite the anxiety and misery they cause, it seems to be pot luck who gets sanctioned.”

More than one million unemployed benefits claimants have to meet certain conditions, such as showing they are looking for work, to receive jobseeker’s allowance, employment and support allowance, universal credit and income support. Almost a quarter of claimants (24%) between 2010 and 2015 received a sanction, the report said. A four-week penalty can mean a claimant over-25 losing £300. In 2015, 800,000 claimants were referred to the DWP for possible sanctions, the report said. Of those, half were then sanctioned across at least one of four benefits. The NAO estimates the DWP withheld £132m from claimants through sanctions in 2015, and paid them £35m in hardship payments. But the costs of administering the system was up to £50m in 2015 while the impact on wider public spending through additional support or savings had not been calculated at all by the DWP



Doom or Hope?

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Climate change has increased desertification, deforestation, melting ice caps, higher sea levels, stronger storms, and air pollution and all leading to increased population displacement. The resulting migrants are being called “climate refugees.” Natural disasters displaced 36 million people in 2009, the year of the last full study. Of those, 20 million moved because of climate-change related factors. Scientists predict natural disaster-related refugees to increase to as many as 50 to 200 million in 2050, mostly in developing nations without the resources to cope, such as in poorer coastal countries in Asia, and in regions of Africa subject to desertification. North America, Europe, China, Russia, India, Indonesia, Japan, Brazil cause most of the emissions on an absolute, cumulative, and per-capita basis, yet, it is people in the developing countries who suffer most of the effects. Short-term economic gain by developed and emerging economies is trumping considerations for the environment and our fellow human beings.

The continent that’s most at risk from the effects of climate change is Africa. 240 million people in Africa live in extreme poverty, much of which is concentrated in rural areas, on small farms. Many live on the brink. One extreme event can drive people into poverty almost instantly. Rural poverty and food insecurity have long been a reality in many parts of sub-Saharan Africa, but rising temperatures and the disruption of seasonal rains upon which millions of small-scale farmers rely is creating altogether new challenges for Africa’s poorest people. Climatologists estimate that in East Africa it is approximately 1.5 degrees Fahrenheit warmer today than it was in the 1980s, while rainfall during the main rainy season has fallen by 15 per cent. Projections also show that if the challenge is not addressed, climate change could drive down yields of staple crops such as rice, wheat and maize by 20 percent in the next 30 years. During the same period, the growing season for grain crops in some regions could shorten by up to 40 percent. A new index that lists the vulnerability and preparedness of countries for changing climate shows that 36 of the states at the very bottom of the list are in sub-Saharan Africa and central to Africa’s vulnerability to the effects of climate change is a heavy reliance on rain-fed agriculture.

Currently, close to 10 million people in Ethiopia are receiving emergency food assistance following the worst drought in half a century, while in Southern Africa up to 32 million people are at risk, following the failure of seasonal rains that has created the worst crisis in 35 years. Hunger will deepen in this region in the coming months too, as grain stores empty, and rural poor households must wait until March until new crops are harvested. Researchers warn that the effects of global warming in sub-Saharan Africa are putting peace and stability in the region at risk, with a recent report from the University of Berkeley concluding that climate factors and the struggle for a share of scarce water resources has increased the risks of conflict in the region significantly.

Today, between 25-30 percent of the income that is generated in sub-Saharan Africa is from agriculture, while up to 70 percent of people rely directly on farming for their survival. Contrast this with the European Union, where farming is responsible for less than 3 percent of GDP, and creates employment, often part-time, for less than 5 percent of working people. At the same time, irrigated agriculture counts for under 6 percent of all agricultural production in Africa, compared to 30 percent in Europe and 35 percent in India.

The message is not all doom and gloom however. Africa’s agricultural sector has huge untapped potential. Under one-third of Africa’s arable farmland is cultivated, while irrigated production can be increased greatly, meaning there is enormous potential to grow much more than at present. Improved farming technologies, better access to good quality seed, reform of land laws, and the utilization of information systems including mobile phones to give farmers timely information, can all contribute greatly to the growth of Africa’s farming sector. ‘Climate smart’ farming practices will enable Africa’s small-holder farmers to grow food in a way that is sustainable, and will help them to use their natural resources wisely. A reduction in food losses due to better storage and packing, improved infrastructure, and stronger links to markets will make agriculture on the continent more productive.


What’s urgently needed is to keep global warming below a catastrophic increase of 2 degrees Celsius compared to pre-industrial levels and ensure the viability and sustainability of the food system for future generations. Cuba was all but cut off from petro-products for more than a decade that led to an emphasis on organic farming. University of California-Berkeley researcher Miguel A. Altieri has argued that the bottom line is that “Cuba has been generally able to adequately feed its people.” And there’s no question that Cuba has increased its food harvests — including a more than 350 percent increase in the production of beans, a staple crop, and 145 percent increase in vegetables between 1988 and 2007 — while cutting the use of agro-chemicals for up to 85 percent for some crops. It also became a world leader in urban agriculture. In Havana alone, more than 87,000 acres have been dedicated to urban agriculture, including food production, animal husbandry and forestry. In 2005, the city’s urban gardens produced 272 metric tons of vegetables. Researchers of agroecology and food security have argued that Cuba’s agricultural revolution can offer an example to follow for other countries

Labour Time Vouchers

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Labour vouchers were advocated by Marx as a form of rationing in lower communism. They are not based on the wages system because, as Marx explained in The Critique of the Gotha Programme, the workers do not exchange their products. There is no commodity production. Wage labour implies the separation of the producers from the means of production, whereas, in lower communism, the means of production are owned by everyone.

The World Socialist Movement  does not favour labour vouchers - it is far too cumbersome as a mechanism for rationing. If you are going to have rationing, at least for some goods, there are far more effective and straightforward mechanisms than this. There is now no reason why most goods could not be distributed as free goods as would be the case generally in Marx's higher stage of communism. Marx put forward this proposal somewhat half-heartedly merely as a way of getting to grips with, and responding to, what he called the "unavoidable defects" of the first phase of a communist society where the means of production were not yet fully developed to permit full-blown communism. In other words, labour vouchers were a form of rationing. It is pretty clear that he envisaged them being abandoned as society moved into the higher phase of communism - free access communism - as goods and service became more and more abundantly available. In the Critique of the Gotha Programme, he talked of the principle "from each according to ability to each according to need " coming to apply in higher communism. This expression, which was first coined by Louis Blanc, was deliberately framed in opposition to the doctrine of the followers of Saint-Simon, "Let each be placed according to his capacity and rewarded according to his work" with the clear implication that work should be unremunerated and voluntarily undertaken.

There are numerous problems associated with LTVs and the allied proposal of pricing goods in labour time units. To cite just one, Marx talked of the producer getting back from society "exactly" what he put into it (after various deductions had been made) but how exactly do you determine what someone has contributed? How do you compare the productivity of a dentist and a steel-worker, for example? Do you treat each skill exactly the same and what does that mean in terms of incentives (for which reason advocates of labour vouchers propose such a scheme in the first place - on the grounds that workers need to be "compelled" to work by linking consumption to pay). Not all workers of a given skill level accomplish the same work in an hour

This is just one of many problems. The labour voucher scheme would, in the end, prove to be hugely bureaucratic and wasteful of human labour, notwithstanding all that computer power at our finger-tips will quite likely create conditions that will enable the restoration of petty commodity production and eventually capitalism itself.

Engel's remarks to Schmidt in 1890 reinforces Marx that when the springs of cooperative wealth flow more abundantly, the principle "from each according to ability to each according to need" can be implemented. Meaning none other than free access communism where wealth no longer needs to be rationed and where labour is freely and voluntarily undertaken - the one thing logically implying the other and vice versa. The quote is interesting also in view of the discussion on what was meant by a future "socialist society" i.e. communism:

"There has also been a discussion in the Volks-Tribune about the distribution of products in future society, whether this will take place according to the amount of work done or otherwise. The question has been approached very "materialistically" in opposition to certain idealistic phraseology about justice. But strangely enough, it has not struck anyone that, after all, the method of distribution essentially depends on how much there is to distribute, and that this must surely change with the progress of production and social organization, so that the method of distribution may also change. But everyone who took part in the discussion, "socialist society" appeared not as something undergoing continuous change and progress but as a stable affair fixed once for all, which must, therefore, have a method of distribution fixed once for all. All one can reasonably do, however, is 1) to try and discover the method of distribution to be used at the beginning, and 2) to try and find the general tendency of the further development. But about this I do not find a single word in the whole debate." 

Against Labour-Time Vouchers

To summarise our opposition to Labour Time Vouchers:

1) Many advocates of labour vouchers support the idea of differential payments according to labour contribution. This raises the problem of how you measure one person's contribution in relation another's.

2) Any kind of quid pro quo or exchange set up raises motivational issues and fosters egoism. If you pay people differently people will disagree with the pay rate assigned to them. If you pay them the same, a nuclear scientist will contend that her work is of far greater import than a garbage collector and she should be paid much more. Friction and discontent are almost guaranteed. Not only that, you have no way of ensuring that people will not gravitate towards the most congenial work if all work attracts the same rate. This is because quid pro quo set-ups encourage one to think in terms of what is in one's own interest and not the interests of the larger society. It promotes an atomised individualistic perspective. Garbage will remain uncollected. You can, of course, restrict labour mobility and centrally allocate labour but then you are back to the capitalist state and that in itself creates more problems than it solves. Any kind of quid pro quo set - "I give you something in return for you giving me something else" - has a built in conflict of interests that orientates individuals to adopt an egoistic or self-interested approach vis-a-vis others. You are advocating an exchange economy of some type - though I still fail to see any substantive difference between your system and capitalism other than the fact that you want to wave a magic wand and make everyone gets paid the same, despite economic competition. You have already admitted that managers would be held accountable and that there would be incentives for firms to become more efficient. That can only mean they would be differentially remunerated according to their performance. Managers will want to reduce labour costs for example presumably by reducing hours worked or even laying off workers. How else, after all, is "efficiency" to be measured in your system other than by net income - the difference between revenue and costs. In pursuit of net income, managers incentivised by the competitive desire for higher remuneration will soon enough pit themselves against the workers.

3) A labour voucher scheme will require a huge bureaucracy to administer - on the one hand to administer, police and record labour inputs and on the other to administer police and record purchases. Labour vouchers will require labour time accounting across the board which is massively complicated. You might pay people the same but for planning/allocative purposes you certainly cannot treat labour inputs as equal. The stock argument that we can do all this with the super duper computer technology we have is no argument at all. Computerisation certainly helps with calculation but this is much more than a problem of calculation. It’s also one of evaluation and enforcement. What’s to stop people abusing the system. Who is going to monitor the monitors? And so on.

4) To ensure that goods are cleared at the stores at an efficient rate you have to ensure that the sum total of the face value of vouchers issued equals the sum total of labour inputs in the sphere of production. Otherwise, you risk incurring huge structural shortages or surpluses. This applies not only at the macro level but for specific goods too. One proponent, Paul Cockshott, in his book, suggested selling goods at above or below their labour content in order to influence consumer spending habits but already this is a significant departure from the strict labour voucher scheme. Equally, significantly it opens up the path for speculative buying and selling of goods and hence corruption. What happens to goods after they have been purchased from the public stores. It is in this respect that a role for speculative buying and selling of goods on the black market exists as a very real possibility

5) People under a labour voucher scheme are reputedly paid according to their labour contribution but what about those who cannot work. The very old, the very young, the infirm and the disabled. This was the point made by Marx in the Critique of the Gotha Programme - that it is absurd talking about workers getting the full value of their contribution. Necessarily the working population would have to get less than the value of what they produce and the value of their labour vouchers would have to be adjusted according. All this incidentally would add yet another of unproductive bureaucracy to administer this social welfare scheme

6) There is nothing to prevent a black market emerging alongside and undermining a system of labour vouchers ex-post facto Informal commodity transactions can arise making use of goods purchased with vouchers - particularly if , as is the case with most advocates of labour vouchers it is suggested that vouchers are for specific goods. But even if they were not and with your voucher you could buy any good that still does not stop a black market coming into being. What’s to stop you, for example, growing stuff in your backyard and bartering it for other goods. What’s to stop you combining with others to form an agricultural collective to do the same on a much large scale? Eventually, as we know barter will give way to money and in due course this could quite conceivably lead back to capitalism

From the point of view of administration, free access communism would be immeasurably more efficient and streamlined - bureaucracy will be reduced to a bare minimum. The motivational issues will not arise either. People would not be compelled to do just one particular job but would be free to diversify meaning that for any particular job there would be a massive reservoir of labour provided by almost everyone. Social opinion would also play a decisive role in all this. You would no longer acquire status through conspicuous consumption which would be meaningless in a free access realise and is betrayed by their knee-jerk responses. Quite simply they haven’t really given the idea the serious consideration it merits.
society. The respect and esteem of others - a hugely important motivational factor in any society - would derive from your actual contribution to society and social opinion would directly influence one's choice of work in a dynamic way. Thus, work that was considered most pressing and urgent would, other things being equal, be precisely the kind of work that would attract most prestige and in a dynamic responsive fashion. If people neglected garbage collection the prestige of garbage collecting would rise accordingly as the piles of rubbish mounted. Supply and demand of social prestige, in other words, would step in to resolve the problem. Lastly, of course, there would be no reason for a black market to emerge. There is no way a distribution system of paid for goods can outcompete a system of free goods. There is much more to the sociology and economics of free access communism - Marx's higher communism - than some people seem to

The Roma marginalised in Europe

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blue on top (representing the heavens)
green below (representing the earth)
 chakra in the center (the Indian origin of the Roma),
Widespread deprivation is destroying Roma lives. Families are living excluded from society in shocking conditions, while children with little education face bleak prospects for the future, a new report from the European Union Agency for Fundamental Rights (FRA) shows.

“The levels of deprivation, marginalisation, and discrimination of Europe’s largest minority is a grave failure of law and policy in the EU and its Member States,” says FRA Director Michael O’Flaherty.  





80% of Roma interviewed are at risk of poverty compared with an EU average of 17%.

30% live in households with no tap water and 46% have no indoor toilet, shower or bathroom.

30% of Roma children live in households where someone went to bed hungry at least once in the previous month.

53% of young Roma children attend early childhood education, often less than half the proportion of children their age from the general population in the same country.

Only 30% of the Roma surveyed are in paid work, compared with the average EU employment rate for 2015 of 70%.

41% of Roma feel they have been discriminated against over the past 5 years in everyday situations such as looking for work, at work, housing, health and education.

82% of Roma are unaware of organisations offering support to victims of discrimination.

The Roma community is Europe’s largest ethnic minority. Prejudice and discrimination against gypsies remain commonplace in today's Europe. Some 6-10 million Roma people live in Europe. The group has endured centuries of discrimination and social exclusion which continues today. Violence against Roma, especially in eastern and southeastern Europe continues. Moreover, Roma and refugees are currently being played against each other in the debate over migration.

 In 2015 a large swastika and the words "gas to death" have been written over a memorial to Germany's Roma population murdered by the Nazis. In 1938 SS chief Heinrich Himmler ordered the "final solution of the Gypsy question" which targeted Roma men, women and children whose families had roots in Germany dating back at least six centuries. Historians are unsure exactly how many Roma were killed during the Holocaust. Estimates range from 220,000 to more than half a million. Germany only recognised the genocide in 1982 and it took until 2012 for a memorial to the Sinti and Roma to be officially opened on German soil.

The global market economy

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Professor Kaushik Basu, professor of economics and the C. Marks Professor of International Studies at Cornell University, former chief economist of the World Bank and former chief economic advisor to the Indian government, describes globalisation of labour and the rise of automation as “a crisis in the global labour market.”

According to Basu, the big change from previous technology increases has been the “sharp rise in technology that links workers in different places”. This means that wealthy nations are now able to access “cheap labour that was earlier tucked away in faraway places”. The problem is the “bottom end of labour” in rich countries like Australia, USA and the UK is now in direct competition with “workers in poorer countries who for the reason of being in poorer countries command a much lower wage”. This competition for labour “is causing inequality to get exacerbated” in wealthy countries. The crisis in the global labour market is “feeding into a lot of economic and political problems and manifesting in different ways”.

One of the more stark ways it is manifested is the declining share of national income going to workers. This decline is something that has occurred across most developed nations since the mid-1970s, but the drop in Australia is among the most marked.

In 1975, two-thirds of Australia’s GDP was in the form of wages; in 2014, it was just 53%.

 Real wages have flatten, even while labour productivity improves. The winners from globalised labour are the “profit takers” in the wealthy ones. He argues the solution to the dilemma of outsourcing and the replacement of work by automated processes is to not think of it as a “labour versus labour problem – workers in rich countries and workers in poor countries.” Instead, he argues, “we have to face up to the fact that this is also a wage versus profit problem – with an increase in the share of profits, and a decrease in the share of wages.”

Basu explains that a protectionist trade policy to block the outsourcing of labour looks very good “at first sight” because it would seem like “you’re protecting jobs among your own workers in your own country”. But what would happen is that other nations would continue to use the cheap labour and would “out-compete” the protectionist nation.

Of course, Basu is no socialist. His solution is for “a redistributed government which takes away a slice from the rich and provides it to the workers in the form of health benefits education and also some form of profit share”. He advocates the way to respond to the declining share of wages due to globalisation and automation is to “think of some form of redistribution so that workers get their income shored up” and “to allow workers to get a share of profits”. Uh-huh, he is asking for the capitalist class to reduce their slice of pie which in the few hundred years of capitalism has rarely happened exept by the power of the unions extracting more of the surplus value they produce


We wouldn’t expect him to actually question the actual existence of the whole wages and profit system.

The class war powder keg in America

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For the last 35 years, hourly wages have been falling far behind economy-wide productivity. This has led to wage stagnation and inequality, which is now being felt by the majority of middle-class workers. Since year 2000, Gross Domestic Product growth has been 1.8%, and consumer consumption is now 71% of the economy. The relentless effort by the corporations to reduce labor costs has been very successful, but now consumer consumption is not high enough to buy all the goods that America’s factories can produce.

In the late 1970s, corporations began to go all out to reduce their labor costs. The chart shows that productivity rose 243% from 1973 to 2013 and hourly compensation only grew by 9.2%. Working families are now really feeling the pain of these trends, but they don’t understand the policy decisions and strategies that created this situation. The corporations were incredibly successful at lowering labor costs by using the following strategies:

Automation: Automation of production lines began to eliminate jobs in the 1960s. After 1980, big corporations began investing more heavily in labor reducing equipment to eliminate blue collar jobs. Then along came the internet and personal computers, which helped corporations eliminate millions of white collar jobs too.

Union membership: American corporations have made a concerted effort to get rid of unions since 1980, and they have been very successful. In 2013, the unionized workforce in America hit a 97 year low. Only 11.3% of all workers were unionized. In the private sector, unionization fell to 6.6%, down from a peak of 35% in the 1950s. The Economic Policy Institute notes: "The decline of unions can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007."

Two-Tier Wage Systems: The most insidious strategy to reduce wages was the introduction of the two-tier pay system, which was part of the move toward temporary and part–time jobs. Generally, the two–tier pay system rewards long-time employees, allowing them to keep their current wages and benefits, but reduces wages and benefits of all new employees. This encourages older union workers to vote against younger workers to maintain their status and further erodes the union solidarity. Over time, as older workers retire and new workers are hired, the overall wage scale of the company declines. A good example of this strategy is the auto industry. After Chrysler and GM filed for bankruptcy, the United Auto Workers accepted a two-tier wage pay system that kept senior workers at $29 per hour and new hires at $16 per hour, in addition to cuts in their benefits and healthcare. The auto industry projects that they will hire 14,750 people in the next few years at the new lower wage. Since 1980, two-tier wage programs have been used in the airline, railroads, construction, chemicals, electrical machinery, petroleum, printing textiles, food, transportation equipment, communications, health services, finance, insurance, steel, aircraft production, tire, wholesale and retail industries.

Outsourcing & Offshoring: More than 5 million U.S. manufacturing jobs were lost between 1997 and 2014. Most of those job losses were due to growing trade deficits with countries that have negotiated trade and investment deals with the United States. Between 2001, when China came into the WTO, and 2013, the U.S. trade deficit with China increased $240 billion. These growing trade deficits eliminated 3.2 million U.S. jobs. This fueled the growth of thousands of new manufacturing plants in China that generated exports to the United States and other markets.

Temporary workers: Many of the jobs that have been created since the beginning of the Great Recession have been part-time or temporary jobs. The U.S. Bureau of Labor Statistics notes that part-time or temporary jobs grew from 1.9 million in Jan. 2010, to 2.7 million in July 2013. The survey also reports that 30% of these people would like to get full-time jobs. In addition to part-time jobs, many other changes have impacted wages including: the lowering of the inflation-adjusted value of the federal minimum wage, the decrease in overtime eligibility for workers, and the misclassification of workers as independent contractors. There are several reasons for the surge in part-time jobs. First, businesses are still uncertain of the recovery and do not want to hire full-time people and then lay them off if there is a downturn. Second, consumer demand (measured as consumption) is still too low and many manufacturing sectors have too much capacity. Third, it also appears that many small businesses are trying to keep their headcounts below 50 people to avoid Obamacare. One problem is that part-time and temporary workers usually don’t get any benefits. But the real downside is that people with these kinds of jobs simply do not make enough money to support a family without using food stamps, and other government support. In addition to part-time and temporary workers, there is another growing category called contract workers. These are full-time workers who are self-employed but not part of any company’s head count. They do not receive benefits and have to pay their own payroll taxes.

Contract workers: They are a new and growing employment category in the new economy. The government estimates that 2.39% or about 3 million people in the workforce are contractors. Contractors are popular in manufacturing, janitorial services, food service, computer programming, home care services, healthcare and a host of other industries. Contract workers might be the wave of the future as corporations continue to try to reduce their head counts. The online job site CareerBuilders.com, cites research that shows "42% of all employers intend to hire temporary or contract workers as part of their staffing strategy--a 14% increase over the last 5 years.” All of these job categories are contributing to the trend in declining or stagnant wages of the middle class.

Financial Deregulation: The deregulation of the finance industry also has contributed to the lower wages because it shifted the income to the upper end of the income scale. Corporations also lobbied Congress to ignore the trade deficit and to eliminate any attempt at changing labor laws. The Economic Policy Institute research found that, "Falling top tax rates, preferential tax treatment of stock options and bonuses, failures in corporate governance, and the deregulation of finance all combined to increase the incentive and the ability of well-placed economic actors to claim larger incomes over the past generation."


Inequality: The irony of this story of decreasing wages and benefits of workers is the anomaly of CEO compensation. As wages and income declined, corporate profits rose--along with the salaries and benefits of CEOs. A research report from the Economic Policy Institute revealed that, “In 1965, U.S. CEOs in major companies earned 24 times more than an average worker; this ratio grew to 35 in 1978 and to 71 in 1989. The ratio surged in the 1990s and hit 300 at the end of the recovery in 2000." Since then, however, CEO pay has exploded and, by 2005, the average CEO was paid $10,982,000 a year, or 262 times that of an average worker ($41,861). Working people know of this inequality, and it sticks in their craw. Free market capitalists make the case that the market dictates prices and wages based on competition, and supply and demand. But labor has not been in a position to have any leverage since globalization started. So wages have stagnated or fallen while corporate profits and CEO salaries have reached new heights. Wages have fallen from 50% of GDP to 43.5% since 2001, while wages of the top 1% have climbed from 7.3% to 12.9% of GDP. An economist at the University of California found that the top 1% of households garnered 65% of the nation’s income growth between 2002 and 2007.


Corporations are are not patriotic, nationalistic, loyal, empathetic or benevolent. They are not going to raise wages unless they are forced to. According to the U.S. Bureau of Labor statistics, 94% of the jobs created between 2014 and 2024 will be in the service part of the economy. Their chart, Employment by major occupational group 2014 projected 2024, shows that 81.7% of the total projected jobs (130,989,000 jobs) will have median annual wages of less than $42,000 per year. Sixty-five percent will earn less than $37,000 per year. As food, healthcare, daycare, and rent costs continue to increase, working Americans find it increasingly hard to make ends meet and instead live paycheck to paycheck. We already have seen a populist reaction to this threat in Trump and Sanders supporters, but there is a much bigger powder keg, to explode.


COOPS-5

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Self-Management = Self Exploitation

"Within the framework of present society, producers’ co-operatives are limited to the role of simple annexes to consumers’ co-operatives. It appears, therefore, that the latter must be the beginning of the proposed social change. But this way the expected reform of society by means of co-operatives ceases to be an offensive against capitalist production. That is, it ceases to be an attack against the principal bases of capitalist economy. It becomes, instead, a struggle against commercial capital, especially small and middle-sized commercial capital. It becomes an attack made on the twigs of the capitalist tree." - Rosa Luxemburg

Capitalism is a system of society based on the class monopoly of the means of life, it has the following six essential characteristics:
1. Generalised commodity production, nearly all wealth being produced for sale on a market.
2. The investment of capital in production with a view to obtaining a monetary profit.
3. The exploitation of wage labour, the source of profit being the unpaid labour of the producers.
4. The regulation of production by the market via a competitive struggle for profits.
5. The accumulation of capital out of profits, leading to the expansion and development of the forces of production.
6. A single world economy.

In capitalism, the motive for producing goods and services is to sell them for a profit, not to satisfy people's needs. The products of capitalist production have to find a buyer, of course, but this is only incidental to the main aim of making a profit, of ending up with more money than was originally invested. This is not a theory that we have thought up but a fact you can easily confirm for yourself by reading the financial press. Production is started not by what consumers are prepared to pay for to satisfy their needs but by what the capitalists calculate can be sold at a profit. Those goods may satisfy human needs but those needs will not be met if people do not have sufficient money. The profit motive is not just the result of greed on behalf of individual capitalists. They do not have a choice about it. The need to make a profit is imposed on capitalists as a condition for not losing their investments and their position as capitalists. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to keep their means and methods of production up to date. Capitalism produces wealth for sale on a market with a view to profit as do cooperaatives. The internal structure of the enterprise — who makes the decisions, who gets the profits varies according to their differing historical and political conditions. The significant about the enterprise from an economic point of view is not its internal structure but its role as the mechanism through which the laws of the market are transmitted to those who make the decisions about the production of wealth— whoever they may be and however they may be chosen. The internal structure of the enterprise could be, and in a few cases is, quite different from either private or state enterprises. The workers could elect their own management committee or workers' council, but not even this would make any difference to the enterprise's economic role.

The attraction of cooperatives is very easy to understand. You have no boss to struggle against. If your aspiration is to find a comfortable niche within capitalism to live out your days, then various cooperatives are indeed a benefit but if you are determined to engage in social revolution then pursuing cooperatives will be a dead-end. But, nevertheless, you have to comply with the outside force of capital all the same. Cooperatives in capitalism are still subordinate to the logic of capital (constant rationalisation, growth and globalisation.) Cooperatives are still subject to the whims of the market. Workers at a washing-machine company could strike against wage cuts or resist lay-offs if there is a dip in sales. Workers at a cooperative washing machine manufacturing co-op couldn't do this, they would just have to cut their own wages by some means, or make some of themselves redundant or go to a bank for a loan to tide them over the slump but who would then impose their own terms upon the cooperative. Operating in a competitive market economy, workers have to exploit themselves as if they were exploited by capitalists. While this may be more palatable, it does not change the fact of their subordination to economic processes beyond their control. Profit production and capital accumulation control behaviour and perpetuate the misery and insecurity bound up with it.

Co-ops are not autonomous from capitalism’s dictates. The capitalist system is composed of owner who sell for profit. The fact that an owner is a group of individuals rather than a single person makes no essential difference. This has long been recognised for joint-stock companies. It must now also be recognised for co-operatives. A cooperative which collectively owns all the means of production is merely a collective capitalist company as long as it remains a participant in the market of the capitalist world-economy. No doubt such a business may have different models of management and differences in the division of profit, but this does not change its essential role operating in the world-market. Cooperatives are proof that workers can do without capitalists to tell them what to do, that workers can manage, can make decisions and can be successful but we don't need to keep experimenting to show that. Any redundant 19th century argument that it a school for socialism in the sense of demonstrating that workers are educationally and culturally capable of making decisions about how to operate production are now superfluous as justification for cooperatives. Self-management under capitalism is self-management of your own exploitation. The problem is that coop workers are forced to think like capitalists in order to survive in a capitalist world. It impossible to avoid all the evidence of well over a 100 years of trial and experimentation. Look at what happened to all the co-ops that were set up in the past. They all went bust or were co-opted and utterly transformed from their ambitious beginnings.

Cooperatives will have to compete with each other for a market for their product just as the capitalists do today. To prevent the inevitable ruination that must follow unbridled competition they will have to resort to combination just as the capitalists do today or be out-competed by larger enterprises with more ready access to capital investment. Worker ownership and cooperatives will not succeed by competing on capitalism’s terms. The idea that co-operatives will acquire the economic power to supplant and replace conventional capitalism flies against all the evidence. In the UK did the coop divvy ever politicalise the customers? Has the John Lewis Partnership produced a flood of left-wing syndicalists? It’s this all down to a question of whether you would rather work for John Lewis or Walmart? Just a difference in the degree of wage-slavery you are choosing, in the end, isn't it? Cooperatives may also embody more capitalistic features: they may, for example, hire temporary workers or be inhospitable to potential members of particular ethnic or racial groups. Cooperatives, therefore, often embody quite contradictory values.

 We shouldn't make the mistake of seeing cooperatives as providing a vehicle for social revolutionary change and that they are not immune from the capitalist society they exist within. Let’s not forget that it was only a few years ago that the Tory David Cameron were praising cooperatives and using cooperatives as an argument for privatisation in disguise (much the same as those on the right wing use the Universal Benefit Income as a case for abolishing the welfare state.) Self-management indeed can be promoted by the most very establishment-orientated conservative. We have a few hundred years of experience of cooperatives in action, we are not criticising from any hypothetical position. Workers self-management is in no way incompatible with capitalist exploitation.

The cooperative movement is easily integrated into the capitalist system. Socialism is SOCIAL ownership and DEMOCRATIC control of the means of production and distribution with PRODUCTION being FOR USE to meet the needs of the community and not for exchange on the market to make profits nor should what is commonly used in short-hand "workers control" be confused with SECTIONAL ownership and control, that excludes wider society from the decision making of what, where and how production takes place. Cooperativess are critiqued in much the same way as traditional syndicalism was. Work-place does not equate with community. Cooperatives by themselves do not challenge the system but may offer particular groups of people a means for a survival strategy under capitalism. However if the very demand for workers’ self-management goes no further than seeking to change the form of management of the modern enterprise, it is profoundly conservative. The cooperatives would still have to take decisions in accordance with what the market dictated. Real control by the producers over the production and allocation of wealth is simply not possible within an exchange economy.

Eroding capitalism is a fantasy and as implausible as the idea of taming capitalism. Given the immense power and wealth of large capitalist corporations surely if “non-capitalist” emancipatory forms of economic activities and relations ever grew to the point of threatening the dominance of capitalism, they would simply be crushed. It is enticing to believe that even when the state seems quite uncongenial for advances in social justice and social change, there is still much that can be done. We can get on with the business of building the kernel of a new world, not from the ashes of the old, but within the shell of the old. It is a far-fetched vision of political and economic action.

So if cooperatives are a flawed model, is there anything better to point to? Public libraries are a better example of socialism. A library embody principles of access and distribution which are profoundly anti-capitalist. Consider the difference between the ways a person acquires access to a book in a bookstore and in a library. In a bookstore, you look for the book you want on a shelf, check the price, and if you can afford it and you want it sufficiently, you go to the cashier, hand over the required amount of money, and then leave with the book. In a library you go to the shelf (or more likely these days, to a computer terminal) to see if the book is available, find your book, go to the check-out counter, show your library card, and leave with the book. If the book is already checked out, you get put on a waiting list. In a bookstore the distribution principle is “to each according to ability to pay”; in a public library, the principle of distribution is “to each according to need.” What is more, in the library, if there is an imbalance between supply and demand, the amount of time one has to wait for the book increases; books in scarce supply are rationed by time, not by price. A waiting list is a profoundly egalitarian device: a day in everyone’s life is treated as morally equivalent. A well-resourced library will treat the length of the waiting list as a signal that more copies of a particular book need to be ordered. Libraries can also become multipurpose public amenities, not simply repositories of books. Good libraries provide public space for meetings, sometimes venues for concerts and other performances, and a congenial gathering place for people. Of course, libraries can also be exclusionary zones that are made inhospitable to certain kinds of people. They can be elitist in their budget priorities and their rules. Actual libraries may thus reflect quite contradictory values. But, insofar as they embody emancipatory ideals of equality, democracy, and community, libraries represent socialist practice.

Tuesday, November 29, 2016

Job quality worsens

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A new study from CIBC Economics says Canada has seen “a slow but steady deterioration” in job quality over the past two decades that is widening the income gap. The report comes in the wake of data showing that about 90 per cent of the new jobs created in Canada over the past year were part-time positions.

An ever-larger share of Canadians are finding work in low-paid jobs, while a smaller share of workers are finding work with above-average wages. The share of prime working-age Canadians (aged 25 to 54) who earn below the national average has been rising steadily since the start of the century, from around 50 per cent in 2000 to 53 per cent in 2015.

“That trend is consistent with a widening wage gap symptomatic of deteriorating labour market quality,” CIBC deputy chief economist Benjamin Tal wrote. “The distribution of employment in Canada is not as favourable as it used to be."

This has impacted middle earners the most. While the top 10 per cent of earners have seen the largest wage growth since 1997, it was those in the middle income deciles -- not those at the low end -- who saw the slowest wage growth in that time. People at the low end of the income scale saw faster growth largely due to changes in the minimum wage, the CIBC report said. 

Against Capitalism? Contact:
The Socialist Party of Canada
PO Box 31024
Victoria, B.C.
Canada
V8N 6J3
E-Mail: spc@iname.com

Website: http://www.worldsocialism.org/canada/

Exiled and Excluded in Haiti

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After a court ruling in 2013 that retroactively stripped tens of thousands of people of Dominican citizenship as of November 3, 2016, almost 150,000 Haitian migrants and Dominicans of Haitian descent have entered Haiti since mid-2015, according to the International Organization for Migration. Stripped of their Dominican citizenship before being pushed across the border into Haiti, many are living in deplorable conditions, Human Rights Watch said today. No government or agency has tracked where most of these people have settled in Haiti.

“Not only have many been deprived of their right to nationality, they are not getting the assistance they so desperately need,” said Skye Wheeler, women’s rights emergencies researcher at Human Rights Watch. “Neither the Haitian nor the Dominican government is helping some of the most vulnerable undocumented people.”


 Haitians have suffered earthquakes and hurricanes and man-made borders are just another tragedy they must suffer. 

Fyffes in Honduras

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Three Fyffes subsidiaries – Melon Export, Soled and Suragro – in Choluteca in Honduras employ about 2,700 local people to clear the soil, plant seeds, spray herbicides and pesticides, turn over the melons to prevent sun scorching, and then harvest them. About 90% of the workers are women, many are single mothers, and others are elderly. The work is seasonal, lasting only four to six months.

Workers say they are usually paid less than the minimum wage of about $10 (£8) a day for long shifts under a burning sun. The company provides no water, no toilets and no medical provision if they feel unwell.

“We have to work even if we are sick,” says 65-year-old Maria Gómez, who has been with Melon Export for 28 years. “The conditions haven’t improved since I started.” Gómez’s situation is typical of many workers in developing countries trapped in poverty – with no pension or benefits on offer, the 65-year-old has no chance of retiring soon. She leaves home at 5am and returns at 6pm, and she has to bring her own equipment. “The company gives us nothing. If we don’t bring our own, they won’t let us work,” she says. Concerns about health come from the workers’ use of agrochemicals, including Gramoxone, which was banned by the EU in 2007 but is unrestricted in Honduras. Workers say they are given no protective clothing to wear when using the chemical, which has well-documented health risks. “They don’t even give us face masks,” Gomez claims.

To improve conditions, two years ago employees set up a branch of the agriculture workers’ union Stas. They say they faced opposition from the company and threats from the government, but despite this the union now has 107 members.

“They threaten not to hire union workers. It’s very cruel and oppressive,” says the general secretary, Moisés Sanchez Gómez. He says he was sacked this year because of his union role. “People here have given their life to the company and they get nothing back. I’ve worked for them for 20 years and all I have is the shirt on my back.”

Fyffes says that the union in Choluteca has not been properly constituted or confirmed by the ministry of labour. Union members have filed lawsuits to seek compensation for what they say is underpayment of their wages. But the odds are against them. The town mayor has provoked further anxiety among the workers by saying that union organisers will be to blame if the company leaves. Union members show a threatening note they got last month. “Desist from putting together unions or face the consequences … I warn you,” the note reads. Honduras is among the top three most murderous nations in the world. Human rights activists, environmentalists, journalists and union organisers are frequently targets for speaking out. Some cases cause an international uproar, such as the killing this year of Goldman Prize-winning anti-dam campaigner Berta Cáceres. Many others killings go largely unreported. Last year, a university activist, Hector Martinez Motiño, was gunned down in Choluteca.

Bert Schouwenburg, GMB international officer, said the concerns raised by the government that Fyffes will leave Honduras have created one of the worst situations he has seen in his many years in Latin America. “In an area of high unemployment where entire communities are blacklisted, this is tantamount to threatening them and their families with starvation,” he said. “Fyffes is an appalling employer that cares nothing for its workers who toil in boiling heat to produce the fruit that makes the company’s profits. They have no respect for domestic or international law governing workers’ rights and must be brought to book.”


The Choluteca workers have also had support from the Danish union 3F and other international groups.

GRIEVE NOT FOR ORGREAVE (weeky poem)

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GRIEVE NOT FOR ORGREAVE

Home Secretary, Amber Rudd, has refused to hold a
public enquiry into Police behaviour at Orgreave Pit
during the Miners Strike. Some are of the opinion
that Thatcher used the Police to break the strike.

That Thatcher clone, Ms. Amber Rudd,
Has changed the lights to Red;
The Orgreave miners grievances,
Are now as good as dead.

In this, our great democracy,
It mustn’t be revealed;
That politicians schemed and lied,
Nor can such wounds be healed.

Ms. Rudd is the Home Secretary, (1)
Who’s job is to be tough,
When all the awkward squad persist,
And start to play it rough.

The Front Bench Harpy who ensures,
The Government says nowt;
On any scandal to ensure,
No skeletons get out.

“Not in the public interest”, is
The phrase most often used;
And no excuse in history,
Has been so much abused!

(1) Amber Rudd (who recently signed an extradition order
against a computer hacker) joins a select group of Tory
Home Secretary’s notorious for their hawkishness:

Michael Howard, “Prison works”.

Leon Brittan set up National Reporting Centre for Police during Miners Strike.

Robert Carr curbed freedom to strike.

Reginald Maudling, “British troops fired in self-defence on Bloody Sunday”.

Henry Brooke wanted to deport Jamaican for shoplifting goods worth £2.

David Maxwell Fyfe was embroiled in the hanging case of Derek Bentley.

© Richard Layton


Enough Food for Everyone

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Hunger is not a random condition. The problem is that many people in the world don’t have money to buy food. Hunger is caused by poverty and inequality, not scarcity. Overpopulation isn't the cause of hunger, "fixing" overpopulation won't fix hunger. In fact, the obsession with overpopulation often leads to precious aid money being spent on population control rather than real aid. "Family planning" programs miss the real point, especially in places like Africa--which is that the people need legitimate, concrete aid.

There is enough food in the world today for everyone to have the nourishment necessary for a healthy and productive life. For the world as a whole, per capita food availability has risen from about 2220 kcal/person/day in the early 1960s to 2790 kcal/person/day in 2006-08, while developing countries even recorded a leap from 1850 kcal/person/day to over 2640 kcal/person/day. The FAO has maintained consistently that, on the basis of availability of suitable land for rain-fed and irrigated agriculture, enough food could be produced for the much larger human population predicted for 30 years from now.

The world's farmers are harvesting hundreds of millions of tons more grain each year on tens of millions acres less land than they did in the 1970s and '80s. For instance, according to USDA figures, the world was producing 1.9 million metric tons of grain from 579.1 hectares of land (a hectare is 2.47 acres) in 1976. In 2004, we got 3.1 million metric tons of grain from only 517.9 hectares of land.

The world produces 17% more food per person today than 30 years ago. But close to a billion people go to sleep hungry every night. The world already produces more than 1 ½ times enough food to feed everyone on the planet. That’s enough to feed 10 billion people, the population peak we expect by 2050. The call to double food production by 2050 only applies if we continue to prioritize the growing population of livestock and automobiles over hungry people. The bulk of industrially-produced grain crops goes to biofuels and animal feed rather than food for the 1 billion hungry. And then there is the unnecessary loss through waste. An estimated 25 percent of the world’s food calories and up to 50 percent of total food weight are lost or wasted before they can be consumed.

Half the food in the world is produced by 1.5 billion farmers working small plots for which monocultures of any kind are unsustainable. Agroecological practices which is basically farming like a diversified ecosystem conserve soils and water and have proven to produce the most rapid, recognizable and sustainable results. In areas in which soils have already been degraded by conventional agriculture’s chemical “packages”, agroecological methods can increase productivity by 100-300 percent. 400 experts commissioned for the four-year International Assessment on Agriculture, Science and Knowledge for Development (IAASTD 2008) concluded that agroecology and locally-based food economies (rather than the global market) where the best strategies for combating poverty and hunger.

Early explorers of Africa, for example, reported people always had three harvests in storage and no-one went hungry. The idea of buying and selling food was unheard of. Africa could feed the world. Theoretically, it wouldn't even require all of Africa. According to a 2009 report published by the FAO, about 400 million hectares of African savannah are quite suitable for farming--but only 10 percent of that land is currently cultivated. Called the Guinea Savannah Zone, this stretch of arable land through 25 African countries. And, even though Africa has a dire history of war and unstable government, things have recently begun to look up for many of these nations, which means this land is more likely to be cultivated in the future. According to the FAO, "Africa is better placed today to achieve rapid development in agriculture than either northeast Thailand or the Cerrado when their agricultural transformation took off in 1980 . . . There are a number of reasons for this: rapid economic, population and urban growth providing diverse and ample domestic markets; favourable domestic policy environments, improved business climates in many countries; increased foreign and domestic investment in agriculture; and the use of new technologies."

Football's Own Goals

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We often see the headlines of the millionaire footballers. Gareth Bale’s pay is the equivalent to around £350,000 a week after tax, more than the estimated £288,000 Real pay Cristiano Ronaldo. That is not to mention all the sponsorship and promotion deals they make. But what is it like for the rest of the players who don’t make it to the top.

A large number of football players around the world live a precarious existence in which contracts are not respected and their control over their career path is minimal, according to the global players’ union, Fifpro. In a survey of 14,000 footballers working in 54 countries across Europe, the Americas and Africa the median net monthly income was between $1,000 (£804) and $2,000 a month. And 41% of players had experienced delayed salary payments over the last two seasons. The average wage in Britain is widely reported to be around £27,000, the report's authors say it "debunks the myth that players enjoy a highly-privileged lifestyle".

“This is about the reality of our football industry, which is completely different from what most fans are thinking,” said Theo van Seggelen, the secretary general of Fifpro. “It shows that not every football player has three different cars in three different colours. We really see the report as a possibility for urgent change, because we cannot accept this situation any longer. It is confirmation of what we already know, but the problems are also even worse than I had thought. I hope clubs realise they have to feel really ashamed.” He continued, "The vast majority earn modest wages, have short careers, very little security and face an uncertain future when their career comes to an end."

Chief among Fifpro’s concerns is the issue of late payment. Fifa rules allow clubs to pay players up to 90 days after the due date; beyond this point a player is permitted to unilaterally breach his contract although the constraints of the transfer window often make this impractical.

Democratic Republic of Congo was the worst country for both violence and threats of violence from supporters on match days. Scotland was surprisingly in second place in the latter category.


COOPS-4

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Co-ops - a model for self-exploitation

On platforms to-day perorations shadow forth the old ideal; but practically cooperatives are run on purely business lines, apart from the funds devoted to educational and charity purposes. Whilst of itself it is impotent to evolve into a non-plunder society, we have to settle with ourselves whether it is not a force working inside modern society that makes for our goal

In the same way that trusts, municipalities and States make for the unification, the centralisation, of production and distribution, so also does co-operation. That no one would deny. But it can well be urged that multiple shop companies are doing exactly the same, and hence are as valuable from our point of view as co-operative societies. In so far as the latter are working-class organisations, we must undoubtedly see in them weapons of defence in the class war, and of aggression in the expropriation of the capitalists, apart altogether from the training in business methods afforded to so many workers.

Of greatest value to us, distribution is a field where the class war is beginning to break out with a virulence equal to that experienced in the economic and the political fields. Economic necessity drove the weavers of Rochdale into cooperation, and the same cause led to its expansion. Conflicts with the interests of private traders arose, and this, inevitably, produced the boycott and other forms of guerilla warfare. That the traders got the worst of it was a foregone conclusion, as they represented a more primitive system of retailing goods. Some twenty-five years ago, optimistic co-operators anticipated that soon they would monopolise the trade of the working class; but within the last twenty years there has arisen the multiple system alongside a tremendous expansion of the huge emporium system, and these separately (and in the near future, perhaps, conjointly) are beginning to threaten the very existence of the cooperative movement.

The cooperative movement started with a noble ideal: the overthrow of the commercial system by the self-employment of the workers. This has been found impossible, and the co-operators have degenerated into mere joint stock companies or distributive agencies, with agents in all parts of the world buying in the cheapest market, which means beating down the wages of the producer for the benefit of those with capital to spare to invest in these societies and, like Building Societies, are a very good investment for those better off, but for the poverty-stricken proletariat this co-operation is not only useless, but often used for their exploitation. The early pioneers of cooperation had the ideal of a commonwealth of communities more or less self-sacrificing and entirely free from the disbursement of surplus value.

Our duty, then, is, while always advocating cooperative effort to show these people that their movement, so far as it effects the condition of the people as a whole, has been a failure, and must be so as long as they attempt to plant it down in the midst of a competitive commercial system, and that until usury and monopoly of every description is destroyed there can be no real cooperation that shall benefit the workers, and unless they are prepared to do their duty and assist in this destruction, they, in the times coming, will be swept away as part and parcel of the old system of society.

It is be suggested that an enterprise can go from capitalist to socialist by changing the legal structure of ownership and by determining the number of shares assigned to each person. A cooperative may do away with exploitation internally, but it still has to go out onto the market in search of a slice of the profit pie, and that slice will have been extracted from other workers. Common ownership over the means of production cannot be limited to competing cooperative groups where each worker's cooperative fights with the others. That is not common ownership. The fundamentals upon which the economy flows and operates must be changed and reshaped in the rise of socialism following a revolutionary overthrow.

Producers’ cooperatives were voluntary groupings for self-employment and self-government with respect to their own activities. Some of these cooperatives developed independently, others in conjunction with the working class movements. By pooling their resources, workers were able to establish their own workshops and produce without the intervention of capitalists. But their opportunities were from the very beginning circumscribed by the general conditions of capitalist society and its developmental tendencies, which granted them a mere marginal existence. Capitalist development implies the competitive concentration and centralisation of capital. The larger capital destroys the smaller. The cooperative workshops were restricted to special small-scale industries requiring little capital. Soon, the capitalist extension into all industries destroyed their competitive ability and drove them out of business.

Consumers’ cooperatives proved to be more successful and some of them absorbed producers’ cooperatives as sources of supply. But consumers’ cooperatives can hardly be considered as attempts at working class control, even where they were the creation of working class aspirations. At best, they may secure a measure of control in the disposal of wages, for labourers can be robbed twice – at the point of production and at the market place. The costs of commodity circulation are an unavoidable incidental operating expenses incurred in capital production, dividing the capitalists into merchants and entrepreneurs. Since each tries for the profit maximum in its own sphere of operation, their economic interests are not identical. Entrepreneurs thus have no reason to object to consumers’ cooperatives. Currently, they are themselves engaged in dissolving the division of productive and merchant capital by combining the functions of both in the single production and marketing corporation.

If workers reformed capitalism initially so that all firms were based on a cooperative model, exploitation -- inherent to capitalism -- would still exist and eventually destroy the benefits that come out of such a model of 'market socialism'.  Competition between firms, and the tendency of capital to concentrate, would destroy smaller firms. Eventually, monopolies would be built up and slowly workers would lose power as greater companies rise. Cooperatives on a market remain capitalist.

Cooperative worker-ownership schemes resolve none of the basic problems facing workers under capitalism. All the basic relations of capitalist production, exploitation of wage labour, production for sale and profit, and the like remain in effect. A "worker-owned" company run collectively and democratically by its workers, would still function within the overall context of a capitalist economy. Being a co-op does not miraculously free a business from the anarchy of the marketplace, competition, and the effects of capitalism's recurrent economic crises. In order to compete "worker-owned" enterprises have little choice but to intensify exploitation just as much as their capitalist-owned competitors do. They must cut wages, close old factories, modernize outmoded equipment and lay off workers made superfluous by automation although they may do so with a bit more compassion than conventional companies. To make such schemes "succeed" in a capitalist context, workers must make more self-sacrifices and intensify their own exploitation.

This is worker capitalism. Yet, it does demonstrate that production in no way depends on a capitalist class. But, if the concept of worker ownership is to truly benefit workers, it must be effected on a society-wide basis not in niche corners of the business world. To do that, a socialist revolution is needed to abolish the entire system based on private ownership and control of the means of production by a parasitic capitalist class. The potential of worker ownership can be fully realized only by replacing an economic system based on exploitation, competition, the market and the profit motive with one based on social co-operation for the common good. What workers must gain is not nominal ownership of individual plants, but real control of the entire economy.

Capitalism also affects co-ops in other ways. In Argentina, for example, some capitalist-dominated companies simply refused to do business with worker-owned cooperatives. Obviously, if almost all other businesses were coops, then the conventional companies wouldn't be able to survive. However, capitalist companies dominate and have the support of the state. Capitalists control the government so policies would be enacted to try as much as possible to prevent workers from asserting an increased degree of independence as long as the plutocrats hold the reins of power and fear the spread of increasing workers’ consciousness.

But surely the cooperative movement is essentially socialist? The former Tory prime minister, David Cameron stole the clothes of Robert Owen by using the title Pioneer Schools - after the Rochdale Pioneers - for his first proposals for a new “co-operative” approach to education and “free” charter schools.  He explained that "The co-operative principle captures precisely the vision of social progress that we on the centre-right believe in - the idea of social responsibility, that we're all in this together, that there is such a thing as society, it's just not the same thing as the state," he said, adding that the conservative cooperative movement campaign for "public ownership of public services and public facilities" does not mean he believes in state ownership of those services. He was following in the foot-steps of such radical agencies as the American Peace Corp and USAID who promoted that miners in Bolivia form cooperatives who are currently now in dispute with the Leftist government of Evo Morales.

In the Soviet Union the state used to own most industry and agriculture, the ‘people’ were legally the owners, but it was the bureaucracy which had exclusive control of the means of production and therefore it was they who in PRACTICE owned the means of production. Equally, a workers cooperative whilst instituting common ownership amongst its members is a form of private ownership as against the rest of society. Cooperatives are not the means to socialism but the end. Only in socialism can we really achieve cooperative equality. So long as the relationship between workers cooperatives is governed by the market or indeed by any means of equal EXCHANGE, then so long will people as a whole fail to exert conscious social control over society as a whole. So long as production remains primarily geared towards exchange on the market rather than towards directly satisfying peoples self-expressed needs them ‘common ownership of the means of production and distribution’ will not have been achieved. You can’t exchange that which is held in common or the products of that held in common.

Right now, and as long as the capitalist system exists, we all have to live within it. Capitalist relations affect and dominate every aspect of life. The world-wide social order of production for profit can’t be changed by opting out of it. We cannot escape the system.

For example, if you form a cooperative to manufacture shoes, you still have to buy the materials and sell the shoes in an international market. Buyers want the shoes as cheaply as possible. How can you compete successfully against companies that produce similar shoes using exploited labour without driving down the cost of your shoes by exploiting yourself? There cannot be socialism in one country, much less in a single cooperative or network of cooperatives. Even if the members of a m cooperative or network of cooperatives are nominally their own bosses, it follows from the continued existence of the capitalist relations that “the process of production has mastery over [human beings], instead of the opposite…” as Marx pointed out, Thus as long as “…The co-operative factories run by workers themselves [exist within capitalism]…they naturally reproduce in all cases, in their present organization, all the defects of the existing system, and must reproduce them…the opposition between capital and labour is abolished here…only in the form that the workers in association become their own capitalist, i.e., they use the means of production to valorize their own labour.”  What was crucial to Marx wasn’t which human beings were nominally in control, but whether the process of production had mastery over human beings, or the opposite. We cannot endorse a system of worker-run cooperatives where “the workers in association are their own capitalist.” That is, in order to compete effectively, they pay themselves the minimum and extract from themselves the maximum output. Even within capitalist-owned firms, the cooperative labour process is a harbinger of socialism. And capitalism’s creation of a socialized labour force is the creation of a new social power that can bring it down. But as long as capitalism exists, cooperative labour is neither self-directed activity nor the partial emergence of the new society within the old one. Labour can become freely associated only by breaking with the enslaving laws of capitalist production. There is no in-between. The system must be uprooted and replaced with a wholly different way of working, not just distributing. And we need a system in which it’s possible to produce for human needs, not for the sake of accumulating more capital. The ideal of worker-owned and -operated production neglects the fact that, as Marx observed, the conditions for industrial production are not essentially the workers’ own labour, but rather more socially general: production has become the actual property of society.

The ideal of worker-owned and -operated production neglects the fact that, as Marx observed, the conditions for industrial production are not essentially the workers’ own labour, but rather more socially general: production has become the actual property of society.